Sensex, Nifty log lifetime highs as markets cheer Modi’s I-day pledge

The S&P BSE Sensex hit its all-time high of 26413.11 before closing at 26391 with a gain of 288 points, up 1.10 per cent.

Stock market indices, on Monday, surged to their historic highs following frantic buying by foreign and domestic institutions as well as by retail investors.

Market analysts said Monday’s rally was partly led by Prime Minister Narendra Modi’s Independence Day ‘candid’ speech where he made it clear that the bureaucracy and the government would work diligently for the benefit of the nation.

There was no dampener despite the fact that Mr. Modi did not make any major policy announcement as expected by the markets earlier. The easing of wholesale price index-based inflation also helped. The S&P BSE Sensex hit its all-time high of 26413.11 before closing at 26391 with a gain of 288 points, up 1.10 per cent. Similarly, the broader NSE Nifty closed with a gain of 82.55 points or 1.06 per cent at 7874.25, its historic high. The Nifty had touched an intra-day high of 7880.50.

The rally was supported by banking, oil, capital goods and infrastructure stocks. Among Sensex and Nifty stocks ONGC, Cipla, Axis Bank, BHEL, Tata Motors and BPCL were the top gainers. Tata Motors surged to its 52-week high following encouraging Jaguar Land Rover sales numbers. “Today’s (Monday) movement was because of Mr. Modi’s Independence Day speech and the fact that foreign institutional investors (FIIs) and domestic funds participated in the rally. There was some amount of short-covering that also contributed to the rise. What the PM talked about was only the intention and the question is whether market should go bullish on this without the execution of those announcements. I don’t see any immediate trigger,” said Ambareesh Baliga, independent market analyst.

“The movement should not be linked to any fundamental changes. One can cite any reason after the market rallied. But Mr. Modi’s speech did help in confidence building. He was not talking for the last two months and people were clueless as to what was happening. Now that he spoke, it helped a lot to boost the sentiment. The fact is that the market has come to a bullish trend. The next three years will be extremely positive for the equity markets as the fundamentals are promising,” said Anand Rathi, Chairman, Anand Rathi Securities.

“Recent reform announcements such as Jan Dhan Yojna brought positive sentiment in the markets. Global markets also supported. Also, S&P has taken note of new policies and road map of the government which also induced positive sentiment in the market,” said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

However, some analysts believe that favourable global conditions have helped. “The market reacted positively as the geopolitical conditions have improved,” said Pramit Brambhatt, CEO, Veracity Financial Services.